Smart Money Habits for Kids: Saving, Spending, and Earning
Learn proven strategies to teach kids about money through saving, spending wisely, and earning through chores.
# Smart Money Habits for Kids: Saving, Spending, and Earning
Teaching kids about money early helps them build healthy financial habits. Whether you're a parent or a young person wanting to learn, these practical strategies will set you up for financial success.
Why Money Habits Matter Now
Money habits in children are pretty much formed between the ages of 6 and 12. This is the perfect time to learn because financial education has been linked to lower debt levels, higher savings, and higher credit scores as children mature into adulthood.
The Three-Jar Method: Spend, Save, Give
One of the easiest ways to manage money is the three-jar system. As they earn money, help them organize it into giving, saving and spending envelopes or jars. This simple visual tool helps kids see where their money goes and teaches them to balance all three areas.
Label one jar for savings, one for spending, and one for giving. Watching the jars fill up reinforces the connection between saving and reaching goals.
Earning Money Through Chores
Kids learn best through real-life experiences—like saving in a clear jar, paying with cash and earning money through chores. Actual hands-on experience with money was tied so strongly to kids' future financial self-efficacy—to all kinds of financial outcomes we want them to have later in life.
In 2022, parents gave their eight to 14-year olds an average allowance of $19.39 a week. A common guideline is $1 per year of age per week (e.g., a 10-year-old would receive $10 weekly).
Smart Spending Habits
Teaching children about money builds through budgeting together and separating needs from wants. Controlling impulse buying is a major budget-saver that becomes second-nature with practice.
Instead of just telling a child to "save money," encourage them to set a goal like a new toy, a ticket to a movie, or even something bigger like a bike. Write the goal down, post a picture of it near their jar, and let them track how much more they need. Each deposit brings them closer!